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Lower Middle Class Largest Consumer of Cosmetics in Brazil

By: Fernanda Bonifacio
Posted: April 7, 2011, from the April 2011 issue of GCI Magazine.

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The large number of new products launched in the Brazilian market is another factor to be considered in the country’s shifting consumer patterns. According to the Brazilian Association of the Cosmetic, Toiletry & Fragrance Industry (ABIHPEC), an average of 20 new items hit the market daily.

Gisele Bündchen Launches Cosmetic Line

Tired of playing a supporting role in the beauty market, supermodel Gisele Bündchen decided to launch her own skin care brand—Sejaa. The products are claimed to be formulated with a high concentration of natural ingredients and aromatherapy fragrances, and utilize recyclable packaging.

All three products in the line are manufactured in a plant in Phoenix, AZ, and sold only through the brand’s website in the U.S. and Canada. Imported to Brazil by Classy Brands, they are available at Droga Raia—a pharmacy chain of 362 stores—and Sacks, the largest online retailer of fragrances and cosmetics in Brazil and now owned by LVMH [additional information on this transaction can be found in the November 2010 Inside Brazil column].

Sejaa is expected to sell approximately 300,000 units and reach revenues of R$30 million in its first year of operations. O Boticário Makes Direct Sales Debut with Eudora Brand After a decade of tests and research, O Boticário will launch the Eudora brand to compete with giants such as Avon and Natura in the direct sales market. According to company president Artur Grynbaum, the development of a new line for direct sale resulted from a combination of two factors: the maturity of O Boticário’s franchise system, which limits the possibility of opening new stores; and Brazil’s positive economic scenario. “There is an opportunity in the consumer goods sector, and we decided not to [align this new brand] venture with [the O Boticário brand strategy], which will keep following its path,” said Grynbaum.

He reported that products in the Eudora brand will be manufactured at the company’s current plant in the state of Paraná, and the new demand will be accommodated due to an expansion of its production capacity, which required investments of R$170 million between 2009 and 2012. By opting to create a new brand, the company expands its opportunities in the market while avoiding competing with its more than 3,000 franchisees.

New Regulation Hampers Sales of Organic Cosmetics